How Fracking Killed Nuclear Power
17 comments, 10 called-out
Comment Now
Follow Comments
|
|
|
Last week Exelon canceled plans to upgrade the Lasalle nuclear plant in Illinois (above) and the Limerick plant in Pennsylvania. Exelon officially blamed subsidies for wind power, but an Exelon executive in Chicago fingered cheap natural gas. Photo: Exelon
LExec Says
Cheap natural gas has not only made new nuclear plants unfeasible, an Exelon executive said in Chicago Thursday, but has undermined Exelon’s plans to upgrade its existing fleet.
Five years ago the U.S. faced a shortage of natural gas, and with the prospect of a cap on carbon emissions, the world’s largest nuclear utility expected nuclear power to flourish.
“Nuclear generation was looking phenomenal,” Andy Swaminathan, a senior vice president for portfolio strategy at Consellation—an Exelon company—told about 150 people gathered Thursday at a Chicago Council on Global Affairs forum on shale gas.
“Exelon’s stock price was $90. Unfortunately it’s about a third of that today. It’s directly related to the fact that gas has gone from $10 and $12 an MMBtu to approximately $4 to $5 an MMBtu in the visible trading horizon.”
When the shale gas boom began around 2009, fueled by the proliferation of lateral drilling and hydraulic fracturing of deep shale deposits, Exelon put plans for new nuclear plants on hold and turned to a less-costly strategy of upgrading existing plants. In the last decade, Swaminathan said, Exelon has been able to create the equivalent of a new nuclear plant by increasing production at its existing 20 plants.
But now, Swaminathan said, even upgrades look too costly compared to power generation from cheap natural gas.
“We completely abandoned new nuclear generation in the emergent generation perspective. We said you know what, we’ll go to upgrades… At this point even those look very challenging.”
Exelon has shelved plans to upgrade its LaSalle plant in Illinois and Limerick plant in Pennsylvania, Swaminathan confirmed. But Swaminathan placed the blame on cheap natural gas, while the company’s official release pointed the finger at subsidized wind power:
We removed these previously deferred extended power uprate projects from our program in response to market conditions and artificially depressed power prices resulting from subsidized wind energy,” Exelon spokesman Paul Elsberg said in a statement. “Extended power uprates are large investments with paybacks toward the end of plant life, and in this instance, we decided that the risk involved did not provide the necessary returns.”
Exelon has been campaigning against wind subsidies, but Swaminathan did not mention wind in his analysis of nuclear power’s fall. Although some in the nuclear industry insist the nuclear renaissance is making a comeback, Exelon officials have said repeatedly that the prospects for nuclear power expansion are bleak.
“Obviously I think natural gas would the preferred source of generation going forward,” Swaminathan said.
Follow Jeff McMahon on Facebook, Google Plus, Twitter, or email him here.
|
